Half price Florida property

Half price Florida property

The problems of the US housing market have been well-documented, but while some people are finding it difficult when they are trying to sell, those buying for the future see it as one of the most exciting times in overseas property. BuyAssociation.co.uk Property Editor Paul Collins discovers an innovative way of buying that could get you the bargain of a lifetime.

Introduction

Florida has long been one of the most successful tourist destinations in the world, with a long summer season, attractions for all ages, and a relaxed lifestyle that brings in visitors from around the world. It isn’t just foreigners that come in either – Florida attracts tourists from the US, along with what are referred to as the ‘snowbirds’, or retirees seeking the climate and lifestyle of the Sunshine State.

Imagine then, that it was possible for you to pick up a Florida property for somewhere in the region of 50 per cent of its listed value – no bank or developer tricks, no inflated valuations, and all for a brand new property. Read on to see how easy it is, as well as meeting the people who have already done it…

The story so far

You can’t switch on a TV or pick up a newspaper at the moment without reading about the credit crunch, and much of the blame for the situation has been put at the door of the US property markets, with banks lending mortgages to unsuitable groups of people who have subsequently defaulted on the finance.

This has driven property prices in the US downwards, with agents and developers struggling to sell the properties they have already built. The US house building industry went into overdrive with the easy credit on offer to buyers, and embarked on a huge run of construction. The result of the market slowing down was that many developers have been left with stock they are having trouble selling, and developments they cannot close off until the final properties are sold.

Despite the woes of the domestic property market in the US, the reasons for buying in Florida remain the same. It is still very difficult to beat as a family holiday destination – whether it is for the parks and attractions, the weather, the golf, or just the lifestyle. Not only does this make it an ideal holiday home location, it means Florida remains an attractive proposition for the rental market. In many ways, rental income on property in Florida should be on the up in the coming months and years, as people affected by the credit crunch will be renting in order to visit Florida, rather than buying their own property as they might have done previously.

Bagging a bargain in Florida

So, how do you make sure are able to get the best deal on a property in Florida? One of the most innovative ways has to be the idea of online auctions that has been pioneered for UK buyers through British Homes Group. The company is currently preparing for its third live auction, in association with Stirling Sotheby’s, that will take place on 8th November at 3pm UK time.

Interested parties can bid online from anywhere in the world – there is also a live ‘in person’ auction taking place in Florida – and could easily pick up a brand new property for as little as 50 per cent of the list price, based on previous auctions the company has organised.

First, the properties. This auction is for 18 properties on three different developments across Central Florida - Reunion, Bella Collina and Hammock Beach. All three of these developments are by Ginn Resorts, and the properties have list prices of between £325,700 and £1.3 million. Many of the properties have no reserve prices and must be sold at the auction. Properties in previous auctions have often been sold for half of their list price.

The properties are all completed and newly-built. They are developer-owned but have not been occupied previously. As Bill Cowie, director of British Homes Group, says “These auctions are not a dumping ground for private owners to offload secondary real estate rubbish. In this market they are also a sales platform for top US developers to turn their newly completed luxury homes into much-needed cash.”

This has the advantage that purchasers are not buying foreclosed or repossessed properties as the result of someone else’s misfortune, as is the case in many other auctions. This auction is a way for developers to close off the last remaining properties on successful developments that are up and running, and have residents and communities already in place.

Buying at auction, especially online, is a quick and definitive route to getting a property in Florida, but some people may find the idea of buying online a little daunting. For this reason, British Homes Group has assembled a panel of independent experts to help guide buyers through the process of bidding and the operation of the auction itself.

The webinar will also cover the auction process, how the bidding works, payment schemes and hints and tips for successful bidding. Bidders have the extra reassurance that leading foreign currency exchange provider Moneycorp has created a solution to deal with payment transfers and currency issues for the auction.

We did it!

As this is the third Florida property auction organised by British Homes Group, it is possible to learn from the success stories of previous clients, and the properties they have bought for far less than they expected. In January, Sheila Harrison from Luton registered to take part in the auction that took place in Naples, and snapped up a new three-bedroom apartment on the Ley Landings development for £100,000 ($200,000 at the exchange rate of the time). The list price was double that at $399,000 and another near-identical apartment in the same development was independently valued at $397,000.

Sheila said, "We have been to Naples before and liked it, so when I saw that the auction was on I thought I'd have a go. I think US "no reserve" auctions could attract a lot of interest from, so it’s a win/win situation.

"I have bid at auctions before in the UK but not online, and I found the Stirling Sotheby's online auction was very simple and good fun. I particularly liked the chat line so you could enjoy the feedback with other bidders and in the auction room. I bid for - but didn't get - my favourite apartment which went for about $220,000 and then when I saw my second favourite sold I thought I had to get in there. I think looking back I would rather have paid $10,000 more to get the one I wanted but ours was a great price, and far less than the mid to high $200s we were expecting to pay. Stirling Sotheby's have been very efficient and allowed us 60 days to complete. We plan only to use the apartment for holidays with family and friends and have no intention of renting it out."

Also in January this year, Brian and Debbie Gill, from Leamington, successfully bid $270,000 for a three-bedroom apartment at Oceanwalk Condominiums in New Smyrna Beach.

Brian Gill said, "From previous visits to Florida we had looked at properties on the East, the West and Emerald coast but had not seen a development that we felt was value for money. This appeared to provide a good opportunity and was within easy distance from the airports. We were particularly fond of the Cocoa Beach area and have driven up the coast road and knew a little bit about the New Smyrna area. We were not actively looking to purchase but the combination of the American housing slump and good exchange rate stirred our interest.

“We spent some time researching the area (Google Earth was great!) and looking into the properties currently available. This particular site was first started in 2003, and now has a large number of re-sale units available which provide a good assessment of value. We were prepared to bid about 60 per cent – 65 per cent of the original listed price, depending on the unit for sale. When the auctioneers purchase premium (11 per cent) is included, we estimate our unit has cost approximately 66 per cent of the current price being advertised in the latest building they are now selling off-plan.”

Lee Weaver, Director of Operations of The British Homes Group, says: “In all our 30 years helping UK buyers find Florida dream homes, there has never been a better time for Brits to buy in Florida. With high supply of properties and low demand from locals, and the difficulty of getting credit here, the market has never been so full of bargains. The Dollar has strengthened against Sterling in recent weeks but still presents excellent value for buyers from the UK and Ireland.”